Reinsurance Like other businesses, insurance companies, require protection against risk. Insurers buy insurance from another insurer to reinsure risks they assume. The additional insurer is known as a reinsurer. Reinsurance is insurance for insurance companies. It helps insurers manage risk. In exchange for a share of insurance premiums, a reinsurance company will take on part of the insurance risk.Reinsurance companies typically cover catastrophic losses, when the total losses exceed a specified amount. There are two kinds of reinsurance:Facultative reinsurance, which is negotiated separately for each insurance policy that is reinsuredTreaty reinsurance, which covers a specified share of a group of policies. Sources:http://economictimes.indiatimes.com/definition/reinsurance Understanding InsuranceLife is a risky business. Sometimes those risks hit home – a car collision… your basement suffering water damage… your business interrupted by vandalism. At times like these, insurance is there to help us recover, get us back on our feet and provide peace of mind. Related ServicesHow Insurance WorksInsurers use a pool of many premiums to pay for the home, auto and business losses of Canadians unfortunate enough to experience a loss. You are covered for losses outlined in your contract only, not for predictable events.Buyer BewareInformed buyers carefully review their insurance policy and policy limits. Know what to look for when reviewing all sections of auto, home or business policies.How Premiums Are CalculatedWithin reasonable limits, some of which are prescribed by law, your auto, home and/or business insurance premium is calculated to reflect the probability that you will suffer a claimable loss.Where Premiums GoThe premiums of many policyholders pay the claims of the few who suffer a claim. Insurers put premiums toward a mix of claims costs, investments and operational expenses.Insurance MythsLike any industry, a variety of myths surround insurance. Consumers of auto, home and business insurance may have misconceptions about policies and coverage as well as how the industry operates. Learn some key facts about the Canadian insurance industry. Useful LinksAuto InsuranceRequired by law across Canada, auto insurance covers the owner/driver, passengers, pedestrians and property affected by a vehicle collision.Buying Home InsuranceAs a homeowner, you need to insure your house for replacement costs so that in the event of serious damage or destruction you have adequate coverage. Be sure to keep your home insurance current by reporting material changes or upgrades.Business Insurance CoverageInsurance protects you from losses that may pose a significant threat to your business operations. A major loss to one organization may be a trivial loss to another. When selecting coverage, deductibles and policy limits, there are many factors to consider.Insurance VendorsInsurance is a significant financial investment so it’s worthwhile to learn about your buying options. You can buy insurance from a broker, agent or direct writer.